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Rhode Island Pre-Licensing Life & Health
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In the event that an insured's premium is not paid by the due date, the result will be... - ✔✔Coverage will continue for not more than a maximum of 31 days, beyond which time the policy will lapse A Medicare Supplement policy may be cancelled for which of the following reasons? - ✔✔The insured fails to pay the premium Which type of insurance company allows their policy owners to elect a governing body? - ✔✔Mutual When the Insurance Commissioner deems the public interest would best be served by the issuance of a temporary license the commissioner may issue the license for a period - ✔✔Not to exceed a max of 180 days without requiring an examination In a life insurance transaction when must the producer disclose the name of the insurer? - ✔✔Prior to the sales presentation A life insurance policy owner may sell their policy to a(n) in order to receive a percentage of the policy's face value - ✔✔Viatical Settlement Provider Variable life products require a producer to - ✔✔Hold a Life insurance license and securities license
In the course of making a sales presentation, a producer may not say ... - ✔✔The Rhode Island Guaranty Association will protect you The director of Business Regulation CANNOT take which of the following actions? - ✔✔Activate an insurer's financial reserves Life and Health Producers, who hold Property Casualty authority , are required to complete timely continuing education credits in order to renew their license. Which of the following requirements must be satisfied? - ✔✔Total of 24 credit hours in Life and Health or Property Casualty. 3 of which must be in ethics The Director of Business Regulation may revoke a producer's license upon the finding of... - ✔✔Sharing of commissions The Dept. of Business Regulations may revoke a producer's license for each of the following offenses EXCEPT: - ✔✔Violating an insurer's internal control requirements Advertisement for Accident and Health insurance can be considered all of the following EXCEPT
- ✔✔Company's financial rating The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond - ✔✔6 months If an application for producer license is denied, the applicant may make a written request for a hearing to appeal this decision within - ✔✔30 days
In RI all Accident and Health insurance plans are required to provide coverage for the services of properly licensed midwives in accordance with each of the following requirements EXCEPT: - ✔✔At home birthing services are covered The Director must give how many days notice prior to holding a hearing regarding a producer's unfair or deceptive practice? - ✔✔10 days Which of the following does the RI Life and Health Insurance Guaranty Association Act apply to?
- ✔✔Annuity Contracts In RI the min. rate increase and/or decrease that an insurer may adjust for policy loan interest rates per annum is - ✔✔.50% In state of RI commissions may be paid to a non licensed individual if - ✔✔The commissions were earned on a renewal premium and the individual held the proper license at the time of the original sale A producer making an unfair comparison of two insurance policies is considered to be engaging in - ✔✔Misrepresentation RI requires that an insurance producer must complete hours of continuing education on the subject of ethics every 2 years - ✔✔ 3 hours Essential Benefits without annual and lifetime limits are required on any health policy purchased - ✔✔Through the Federal Marketplace
At what point does an insurer begin to owe interest on death proceeds payable to a life insurance beneficiary - ✔✔Date of death A Long Term care policy may exclude coverage for which of the following conditions - ✔✔Mental or nervous disorders Every HMO conducting business in the state of RI must provide all the following disclosures to newly enrolled subscribers EXCEPT - ✔✔List of current shareholders of the organization A producer knowingly assists client in withholding material facts while taking in an Accident and Health insurance application. His action may be considered which of the following: - ✔✔Fraud One definition of replacement is "the act of replacing an existing insurance policy with another" Replacement is - ✔✔Closely regulated and requires full disclosure What is the earliest age a non disabled individual becomes eligible for Medicare Supplement policy? - ✔✔65 years old Annuity suitability regulations in RI require that a producer obtain each of the following criteria EXCEPT: - ✔✔Sexual Orientation When soliciting an Accident and Health insurance plan, a producer advises the applicant that smoker a non smoker rates are the same. The producer's advice is an act of: - ✔✔Misrepresentation
Convincing a prospective insured to buy an insurance policy based on exaggerations is called - ✔✔Misrepresentation Long Term Care insurance applicants are provided the right to return their policy for a full refund of premium within how many days of its delivery? - ✔✔30 days According to the Affordable Care Act, which of the following coverages is not required? - ✔✔Coverage for cosmetic surgery An applicant for a non residential producer license MUST: - ✔✔Be a producer in good standing in their home state What is the "free look" period in RI - ✔✔ 20 days Insurers using stop loss insurance policies in RI must comply with which of the following? - ✔✔When advertised the elements of coverage including the amount of stop loss insurance must be disclosed According to RI law which of the following information does NOT need to be obtained by a producer recommending an annuity purchase? - ✔✔Marital Status Which of the following correctly describes a certificate of authority? - ✔✔Permits an insurance company to transact business in RI In RI who is authorized to transact insurance sales for an insurance company? - ✔✔Appointed producers
In RI in an insurer licensed to conduct business in RI but domiciled in NJ is called a(n) - ✔✔Foreign Company Health policies sold in RI are REQUIRED to begin medical coverage of a newborn beginning at - ✔✔The moment of birth Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent - ✔✔Only if the child is incapable of of employment and chiefly dependent on the policy owner A Long-Term policy sold in RI MUST be - ✔✔Guaranteed renewable Viatical Settlement death benefit proceeds are payable to the - ✔✔Current beneficiary In RI misappropriation of funds on the part of a licensed producer is defined as - ✔✔Theft RI insurance law requires that a Policy Summary which is a statement of benefit information and policy cost must be disclosed to the insured. According to RI regulations all of the following information must be included with the exception of - ✔✔Producer Commission Scales What is RI's definition of Life Insurance Replacement? - ✔✔A transaction in which a new policy is bought and another is terminated T is a producer, and when hired, is reminded that he has a responsibility to handle client's funds in an honest and ethical manner. This responsibility is referred as: - ✔✔Fiduciary Responsibility
In the course of making a sales presentation, a producer may not say which of the following? - ✔✔"The Rhode Island Guaranty Association will protect you" In RI misappropriation of funds on the part of a licensed producer is defined as - ✔✔Theft Upon finding a producer guilty of misappropriating premium funds, which of the following actions may the Dept. of Business Regulations take? - ✔✔Impose a $50,000 penalty In a life insurance transaction, when must the producer disclose the name of the insurer? - ✔✔Prior to the sales presentation The Director of Business Regulation may revoke a producer's license upon the finding of - ✔✔Sharing of commissions Annuity suitability regulations in the state of RI require that a producer obtain each of the following criteria EXCEPT - ✔✔Sexual orientation An example of life insurance policy replacement would be which of the following - ✔✔Cash surrender an existing life policy and purchasing a new life policy The Life and Health Insurance Guaranty Association is - ✔✔Funded by admitted insurance companies through assessments
An individual whose producer license request has been denied may appeal the department's decision within - ✔✔30 days Interest on death benefit proceeds is payable as which of the following? - ✔✔Interest is assessed at the rate of 9% from the date of the death of the insured and added to the death benefit proceeds Rebating can be described as which of the following? - ✔✔Sharing commissions with a client Advising a proposed insured that the required premium is lower than it actually would be, given the correct rate classification, is an example of - ✔✔Misrepresentation A mutual insurance company and a stock ins. company have one main difference between them. What is it? - ✔✔Stock company is owned by shareholders. Mutual company is owned by policyholders When the insurance Commissioner deems hat the public interest would best be served by the issuance of a temporary license, the Commissioner may issue this license for a period - ✔✔Not to exceed a maximum of 180 days without requiring an examination In RI an insurer licensed to conduct business in RI, but domiciled in NJ, is called a(n) - ✔✔Foreign company Signed disclosure Der the Fair Credit Reporting Act must be obtained - ✔✔At the time of sale Which of the following activities will NOT result in the suspension of a producer's license - ✔✔Working for a foreign insurer
P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own? - ✔✔Endowment in age 70 When is the face amount of a Whole Life Policy paid? - ✔✔When the insured dies or at the policy's maturity date, whichever happens first All individuals covered under a group contract will receive a(n) - ✔✔Certificate A Life insurance policy owner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) rate loan - ✔✔Variable The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n) - ✔✔Accidental death and dismemberment (AD&D) Which of these statements about a Guaranteed Insurability Option Rider is NOT TRUE - ✔✔Evidence of insurability is required when the option is exercised Term Life Policies that have the ability to be converted by permanent coverage may do so during a specific time period. This conversion period - ✔✔Varies according to the contract Who has the option to renew a Renewable Term Policy - ✔✔Insured
Stranger Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n) - ✔✔Third party with no insurable interest When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take - ✔✔Void the policy only if it is discovered during the Contestable period and proven to be material What action can a policy owner take if an application for a bank loan requires collateral - ✔✔Assign policy ownership to the bank Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? - ✔✔Aleatory Which of the following actions is NOT possible with a Universal Life policy - ✔✔Premiums may be applied as a credit against income tax K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used? - ✔✔Conditional What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? - ✔✔Family Maintenance Policy An individual working part time has an annual income of $25,000. If this individual has an IRA what is the maximum deductible IRA contribution allowed? - ✔✔$2,
What is considered a valid reason for small businesses to insure the lives of its major shareholders? - ✔✔Fund for buy-sell agreement T is the policy owner for a Life Insurance policy with an irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the - ✔✔Beneficiary Under a Renewable Term policy - ✔✔The renewal premium is calculated on the basis of the insured's attained age An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - ✔✔When the conditions of the receipt are met Under a Graded Premium policy, the premiums - ✔✔Are lower during the policy's early years Which of these is NOT an element of Life Insurance premiums - ✔✔Morbidity Rate F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? - ✔✔Decreasing Term Policy From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? - ✔✔Fair Credit Reporting Act
All of these are considered sources of underwriting information about an applicant EXCEPT - ✔✔Rating Services How are Roth IRA distributions normally taxed? - ✔✔Distributions are received tax-free Which of the following Life insurance policies combine term insurance with an investment element? - ✔✔Universal Life Insurance policies are offered on a "take it or leave it" basis which makes them: - ✔✔Contracts of Adhesion Who has the right to change a revocable beneficiary? - ✔✔Policy owner J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? - ✔✔The gross premium is higher on a monthly payment mode as compared to being paid annually W is a 39 - year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) - ✔✔Immediate annuity What is the initial source of underwriting for an insurance policy? - ✔✔Application containing statements from the insured This is not a characteristic of an Adjustable Life policy - ✔✔Face amount can be adjusted using policy dividends
Credit life insurance is typically issued with which of the following types of coverage? - ✔✔Decreasing Term When is the face amount of a Whole Life policy paid? - ✔✔When the insured dies or the maturity date, whichever comes first C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true? - ✔✔ABC is the policy owner C is the insured ABC is the beneficiary If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? - ✔✔Insured S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? - ✔✔Full benefits are payable under the Master contract In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and - ✔✔The initial premium Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policy owner becomes disabled? - ✔✔Payor Clause
M had an annual life premium payment due January 1st. She died January 10 without making the premium payment. What action will the insurer take? - ✔✔Pay face amount minus the past due premium How are surrender charges deducted in a life policy with a rear-end loaded provision? - ✔✔Deducted when the policy is discounted The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own? - ✔✔Flexible Installment Deferred When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: - ✔✔Insurable interest in the proposed insured The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called - ✔✔Reinstatement K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she choose - ✔✔Paid-Up Additional Insurance What action should a producer take if the initial premium is NOT submitted with the application? - ✔✔Forward the applicant to the insurer without the initial premium Which statement is correct regarding the premium payment schedule for Whole Life policies - ✔✔Premiums are payable to throughout the insured's lifetime/coverage lasts until death of the insured
